Cyberpunk 2077. “/>On its launch day, Cyberpunk 2077 immediately switched from one of the most anticipated new games of the holiday season to one of this year’s biggest disasters, when game-breaking and comic bugs proved to be so prolific on consoles that Sony even removed the title entirely from its digital store for time be. The developer and publisher CD Projekt Red has had his hands full over the past few weeks juggling with widespread mockery and dissatisfied customers, and now there is a new misfortune in his pile: stock lawsuits.
Two different law firms announced last week that they were filing a lawsuit against CD Projekt, claiming that the company violated the securities law by misleading investors (and everyone else) about the state of Cyberpunk 2077 and whether it would be playable on current generation consoles, the PlayStation 4 and the XBox One.
Statements CD Projekt Red made about Cyberpunk throughout 2020 they were “materially false and misleading”, the complaint alleges (PDF), because the company did not mention that the game “was virtually impossible to play on the current generation Xbox or Playstation systems due to a huge number of bugs”.
These bugs were not widely known before the game’s release, because the company did not make console copies of the game available for review. Each store that had a pre-launch copy of Cyberpunk (including Ars) played on the PC. After the release, CD Projekt apologized for not making the console version available “and, consequently, not allowing you to make a more informed decision about your purchase”.
The suit cites the many launch delays the game faced, from April 2020 to September 2020, then from September to November and eventually from November to December. Every time the studio announced a delay, the executives publicly promised that the game was totally on track, but it just needed a little more polishing and started a period of continuous crisis for that to happen.
In the wake of the game’s release, however, CDPR’s Deputy CEO Adam Kiciński admitted that the company focused too much on this three-fold delay instead of the real problems of the game.
“We underestimated the scale and complexity of the problems, ignored the signs about the need for more time to refine the game on next-generation consoles,” said Kiciński in a conference call.
“We were updating the game on state-of-the-art consoles until the last minute and we thought about doing it in time,” said CEO Marcin Iwiński in the same conference call. “Unfortunately, this resulted in delivering it to the reviewers just a day before the release, which was definitely too late, and the media didn’t get a chance to review it properly. That was not the intention; we were just fixing the game until the last moment. “
CD Projekt Red said in a filing over the weekend that it would “vigorously” defend itself against shareholders’ claims.
Meeting expectations
Given the ongoing disaster of the Cyberpunk 2077 launch, an investor process seemed almost inevitable. This type of legal action is incredibly common whenever a company suffers a major public relations blow.
Under United States law, publicly traded companies have a fiduciary duty to their shareholders. Basically, corporate executives have a legal obligation to act in the interest of the company and its investors. Shareholders and executives tend to interpret this as a legal duty to maximize the company’s profits, although that is not exactly what the law says.
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The argument in this type of share action basically says: the company did something it shouldn’t have done – lied about something, minimized a risk, made a colossal error of judgment and so on – and, as a result, damaged the company’s public image and, in turn, hurt investors.
Pinterest shareholders, for example, filed a lawsuit against the company earlier this month alleging that the board failed with its fiduciary duty, as allegations of widespread discrimination based on race and gender within the company were damaging its image along to its user base, largely female. Google resolved a similar shareholder lawsuit in September over handling harassment complaints within the company. And in April, Zoom investors processed the sensation of the videoconference overnight, arguing that the company should have known that its product was not up to specification before the pandemic arrived.